The Venable Brand IP Seminar (San Francisco) · The Venable Brand IP Seminar (San Francisco) ... “Is the subject of efforts that are ... use of various combinations of human readable

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The Venable Brand IP Seminar(San Francisco)

April 24, 2014

Genevieve Burch Paul Ortiz

Tom Wallerstein Michelle Ravn Appelqvist

Justin Pierce

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Overview

Introduction

Trademarks in Beverage Alcohol

Secure Supply Chain

Trade Secrets

Establishing a World-Class Brand Protection

Program

IP Strategies for the Emergence of 3D

Printing

Questions

Genevieve Burch

Associate General Counsel

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Who We Are

The Private Label

Opportunity

Trademark Issues Unique

to Beverage Alcohol

Agenda

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A premier value-added provider of customizedbeverage alcohol products and services tocustomers around the world

Wine, beer and spirits

6.5 million cases

Sourced from 22 countries

Sold in 15+ countries

100+ employees

Offices in Bay Area and London

Who We Are

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Less developed in US

The Private Label Opportunity

20.7%

32.0% 33.5%

19.4%

43.5%

16.6%

23.7%

1.1%

16.7%

22.8% 21.7%

13.8%

30.6%

12.5%

25.4%

0.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Private Label Share of Alcoholic Beverages by Country 2012 (%)

By Volume

By Value

Source: PLMA

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Provide better quality & value forcustomers

Drive customer loyalty with uniqueofferings

Reduce price-matching

Customers can’t comparison-shop

Protect against big brand price increases

Increase gross margins

Why Exclusive Brands

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WineBrands

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BeerBrands

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SpiritBrands

• Partial list

Customer Partnerships

KrogerSupplier of the Year

2008 and 2009

Whole Foods“Outstanding Wine or

Beer Supplier”Whole Foods Market, May 2013

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Label Approval

Franchise/Distributor protections

Trademarks In Bev Alc

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All labels on beverage alcohol (wine 7% ABV and over –under 7% is FDA) must be approved by the federalgovernment – Department of the Treasury, Tax and TradeBureau (TTB)

Searchable public database

Additional resource for clearance work and disputematters

Can provide information regarding date of first LEGALuse in the US

Can provide information regarding use or non-use,particularly by foreign entities

Label Approval by the Federal Govt.

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Enacted after Prohibition

Attempt to limit excesses that led to prohibition, but alsoeasier to tax

Beverage alcohol must go from producer to distributor toretailer

Some exceptions – wineries, brewpubs

Varies by state

The Three Tier System

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Generally arose in the 1970s – 1990s

Specific to beverage alcohol

Also varies by state

Provides protection to distribution tier

Limits the ability of a producer to change distributorswithout compensation

Compare – Budweiser vs craft beer

Question: Potential challenge from a trademark/IPperspective – property ownership interest by third party

Franchise Laws

Brand Protection: Trade Secrets

Tom Wallerstein, Partner

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What Is A Trade Secret?

Civil Code Section 3426-3426.11: Uniform

Trade Secrets Act

A trade secret can be any “information,”

“including a formula, pattern, compilation,

program, device, method, technique, or

process” Civil Code§3426.1(d)

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What Is A Trade Secret?

“Derives independent economic value, actual

or potential, from not being generally known

to the public or to other persons who can

obtain economic value from its disclosure or

use” Civil Code§3426.1(d)(1)

“Is the subject of efforts that are reasonable

under the circumstances to maintain its

secrecy.” Civil Code§3426.1(d)(2)

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Protecting Company TradeSecrets

Create an Outgoing Employee Protocol

Prepare in advance for potential litigation

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Outgoing Employee Protocol

Ability to execute on short notice

Inventory all electronic devices and image

computer

Require written affirmation that all proprietary

data was returned (beyond IP Agreement)

Provide mechanism for personal information,

pictures, emails, etc.

Provide mechanism for return of information

discovered later

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Preparing for Offensive Litigation

Periodically audit trade secrets. Must be able

to identify with “reasonable particularity” CCP

§2019.210

Declaration regarding independent value

from secrecy

Undertake and document efforts to maintain

secrecy (need to know basis, court filings

under seal, departing employee protocol,

etc.)

Must act promptly; don’t wait for damages

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Best Practices to Avoid BeingSued for Trade SecretMisappropriation

Create Incoming Employee Protocol

Respond promptly to demand letters and

institute comprehensive legal hold to avoid

claims of spoliation

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Incoming Employee Protocol

Document all steps of recruiting, interviewing

and hiring and anticipate witnesses at

deposition and trial

Require incoming employee to represent they

are not bringing and will not disclose prior

company trade secrets

Obtain copy of prior employment agreements

Consider: Why does prior experience with

competitor make the employee valuable?

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Establishing a World Class Brand ProtectionProgram

Michelle Ravn Appelqvist – Senior Director, Senior Counsel

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Agenda

II. Our Brand Protection Philosophy

V. Supply Chain Security

VI. Customs Recordations & Trainings

I. About SanDisk

III. Trademark

VII. Enforcement

VIII. Pointers: Resources & Messaging to Executive Staff

IV. Anti-Counterfeiting Technologies

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Innovation

Digital Storage Solutions in 3 Main Markets:

Rapid GrowthFrom a three-person start-up in Silicon Valley to a world-recognized brand, we have maintained a commitment to advancing

technologies and meeting our customers’ needs. Our patent portfolio is consistently recognized as one of the strongest in thetechnology industry; we hold more than 4,900 patents worldwide.

Mobile Computing Consumer

Flash memory is essential in smartphones, tabletsand other mobile devices. We deliver predictablesupply of any flash memory form factor or capacity tovirtually every major mobile device manufacturer.

SanDisk solid state drives offer energy-efficient,compact, and durable alternatives and additions totraditional hard-disk drives for desktops, laptops andultra-thin PCs.

From cameras to USB drives to MP3 players, you canfind the quality and performance of SanDisktechnology throughout your digital life.

I. About SanDisk

Rankings Trailing 4 Qtr. Financials Global Operations

5,500+ Employees

$6.2B Revenue

$3.6B Net Cash

$0.7B R&D Investment

World-Leading Innovator

4,900+Patents

Financials as of Q3, ‘13. Net Cash = [Cash + cash equivalents + short-term & long-term marketable securities] less [debt at maturity value] as of the end of Q3, ‘13. Headcount & patents as of Oct., ‘13.

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II. Our Brand Protection PhilosophyKey Components

Trademarks

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III. TrademarkWhat is it?: The selection, clearance and global filing strategy for trademarks, which serve as thelegal basis of our branding, licensing and enforcement activity

Clearance for new product names, slogans and logos

Coordinate clearance of foreign language transliterations

Prosecution of SanDisk trademark portfolio

Client “Self-Help” intranet site for clients

Advise on usage of third party trademarks

Trademark opposition actions

Why does it matter?: Revenue impact. Our brand strength drives brand premium; don’t protectyour marks and you may be prohibited from selling

iPad China - $60M settlement with ProView in order for Apple to sell & import /export

iPhone Brazil - $18M settlement with IGB over iPhone trademark

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IV. Anti-Counterfeiting Technologies

What is Serialization? The marking or "tagging" of products in the manufacturing process through the

use of various combinations of human readable or machine readable technologiessuch as serial numbering, barcodes or radio frequency identification RFID

What is Authentication? A verification process utilizing the serialization / tagging of a product, its packaging

and or labeling to confirm its genuine nature (and other key attributes); e.g., via adatabase query

“…The value of changing your processes and technology to uniquely identify items downto the individual item level lies in how you can assure a secure, traceable, and auditablesupply chain that is also highly efficient…it represents the business value of fine-graineddata provided by serialization.”

- Aberdeen Research, 2008

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V. Supply Chain SecurityIdentify Key Routes and Markets

Their delivery methods are reflected by market maturity

High volume low frequency shipments to developing markets

Low volume high frequency parcel shipments to mature on-line markets

SanDisk Confidential

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Customs RecordationAvailable

No Customs Activity

No Formal Recordation;Customs TrainingAvailable

VI. Customs Recordations – Global Availability &Best Practices“You cannot record what you do not register”

Specificdocumentrequired fromlocal counsel

Direct contactvia e-mail

Attendancerequired tosample (HK)

Attendance maybe required tosample ; securitybond required

Simplifiedprocedure;new smallconsignmentsrevisions

Bond required;importance ofreference codes;attendancerequired tosample

Tailor your program to meet relevant jurisdictional requirements, e.g.; Set up a local point of contact Consider language & time zones Be prepared for bond or specific documentation requirements Have capability to travel to port of seizure at short notice

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VI. Customs Trainings

Develop a comprehensive training and reference document

Translate into key languages

Update regularly to ensure relevance to your evolving business

Update to include new markets, products, trademarks & supply line partners and

remove EOL’d products

Include current product images

Update contact information

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VII. Enforcement

What is it?: Maintaining the integrity of the SanDisk brand through worldwide monitoring andenforcement against counterfeits

Proactive authentication technologies and product design (i.e., product identifiers)

Support logistics and operations as well as facilities through provision of security auditresources to “secure from within”

Customs recordations and training programs

Worldwide internet monitoring

Civil and criminal counterfeit raids

Why does it matter?:

Trademark owner has a duty to police use of its mark / exercise “quality control”

Deter Counterfeiters

Build brand equity

Maintain customer / consumer trust

Support distributors / retailers

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VII. EnforcementInternet Monitoring of marketplaces worldwide

Source:SanDisk Brand Protection, March 2014 Overview Estimated Value Scan Monitoring

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VIII. Pointers: Resources Take advantage and become knowledgeable of the growing array of information and

resources offered to assist brand owners in fighting counterfeits

National IPR Center - http://www.iprcenter.gov/

Joint Strategic Plan on IP Enforcement -http://www.whitehouse.gov/sites/default/files/omb/IPEC/2013-us-ipec-joint-strategic-plan.pdf

CBP resources - http://www.cbp.gov/xp/cgov/trade/priority_trade/ipr/

Stay up to date on what key government agencies are doing, look for opportunities toparticipate and consistently engage

Respond in a timely manner

Work through industry or trade associations

At a minimum, effective companies:

Record key IP rights

Upload or provide product identification manuals

Take advantage of free or low-cost training opportunities in key markets

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VIII. Pointers: Executive Messaging You cannot message what you cannot measure Know your audience: make your presentation relevant to each executive

ROI

Use language that resonates: “Year over Year”; “X % sequential increase/decrease”

Sample Metrics/Reporting Increase /Decrease in # of reported Customs detentions compared to previous

year/quarter X % increase in region X. The majority of these detentions were of single pieces of

product in Germany X % increase in region Y 166% increase in APAC (potentially due to BP representative in

Shanghai) # / Quantity detained / Estimated value Time elapsed between first recordation and training vs. first detention

Message Intangibles: Strengthen relationships with customers and consumers by protecting their markets Brand Equity / Consumer Confidence / Competitive Advantage

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VIII. Best Practices: The “∆” between what companies say (or know to be an effective measure) and what they actually do

Many Companies Say They What They Actually Do*

Register Trademarks and Copyrights in KeyMarkets

85% register trademarks in keycountries

14% register copyrights (primarily in USand China)

Record Trademarks or Copyrights with KeyCustoms

30% of those that register trademarksalso record them

22% of those that register copyrightsalso record them

Regularly respond to Customs or other IPenforcement agency inquiries within 3 days

50% do not have a designated persontasked to liaise with Customs

Have an updated product identificationmanual

40% had no manual Of those that did, 50% had not updated

the manual in the past year

Conduct regular Customs or lawenforcement training

60% had not conducted customstraining, or were unaware of whetherthey had done so in the past

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IP Strategies for the Emergence of3D Printing

Justin Pierce, Partner

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3D Printing – Protecting YourBrand, Content and Designs

3D Printing:

The process of making three-dimensional objects

from a digital model by depositing successive

layers of material on top of one another to form

the object.

Image available at adafruit.com

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The Rise of 3D Printing

Websites

– Individuals upload and download digital designfiles

Quickparts.com

Advancements

– Electronic parts

– Human tissue

Key patents are expiring

– Lowers costs of printing

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The Challenge of 3D Printing forBrands

Lead times associated with manufacturing

consumer goods is largely eliminated

Counterfeiters can easily move production sites

due to size of printers

Infringers may sell designs or instructions (e.g., a

three-dimensional model) for consumers to use

on their own 3D printers to make the counterfeit

product at home

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Reactive Approaches to Dealingwith the Rise of 3D Printing

Sue the direct infringer

– May be cost prohibitive to pursue everyinfringer

– Negative PR for entities perceived as over-aggressive enforcers

Pursue indirect infringers: parties who have

knowingly aided in direct infringement (e.g., 3D

printer manufacturers and printing services)

– Negative case law

– Tough to prove “knowing” infringement

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Proactive Approaches to Dealingwith the Rise of 3D Printing

Focus on innovation and speed to market

– Implement a production cycle that stays aheadof competitors and counterfeiters alike

Embrace the use of 3D printing technology

– Harness the benefits of 3D printing technologyto offer a wide variety of product accessories,and efficiently offer replacement parts

Systematically lockdown and enforce IP rights

– Provide multilayered IP protection andsystematically enforce those rights

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Design Patents

Design patents can be obtained in about one year

under standard examination (3-4 months under

expedited examination)

Protects product’s appearance

Seek design patent protection for portions of a

product, as well as the product as a whole

Consider filing continuation applications

– The process of keeping an applicationpending after the original application has beengranted

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Utility Patents

Include business method-type claims in utility

patents

– computer readable medium containinginstructions to manufacture the invention

– computer-implemented method of distributinginstructions for manufacturing a product

Claim methods of manufacturing inventions using

3D printers

Image available at legalteamusa.net

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Copyright

Copyright is traditionally used to protect creative

works that serve no functional purpose

– E.g., toys, sculptures and certain decorativeaccessories

Digital Millennium Copyright Act

– Assert rights against those who are offering to3D print goods based on protected IP

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Trademark or “Trade Dress” Rights

Imitation of edible products, pharmaceuticals and

packaging can be particularly troublesome for

food/drug companies:

– danger to public health– damages brand’s goodwill and public

confidence

Protect your rights

– Monitor 3D printing closely– Trademark and trade dress protection:

• brand name and related device elements• products with distinctive shape or character• external appearance and packaging

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Trade Secrets

Be proactive

Maintain secrecy of recipe/formulas for products

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Contact Information

Justin Pierce, Partner

[email protected]

t 202.344.4442

Thomas Wallerstein, Partner

[email protected]

t 415.653.3707

www.Venable.com

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the road ahead forABC CORPORATIONThank You

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